VA Home Loan Program Borrower Qualification Requirements
Edited by Harry Jensen
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The VA uses a set of guidelines based on a borrower's monthly gross income and debt and residual income to determine the size of mortgage a borrower can qualify forThe VA requires that the borrower have a minimum level of residual (leftover) income after accounting for the monthly mortgage payment and other expensesResidual income is determined by subtracting the following expenses from monthly gross income:About the author
- Taxes
- Maintenance and utilities expenses
- Social Security
- Child care expenses
- Monthly housing expense (monthly mortgage payment, property tax, homeowners insurance)
- Other monthly debt (credit card debt, auto and student loans)
The minimum level of residual income required to qualify for a VA loan depends on the loan amount, the number of people in the borrower's household and the region of the country in which the property is located- The table below outlines the residual income required to qualify for a VA loan based on these factors
Lenders may have some flexibility to reduce the residual income requirements by 5% or more for active-duty or retired personnel if they will continue to benefit from using military-based facilities located near the property being purchasedWhen applying for a VA mortgage, you will need to complete a VA Loan Analysis Form to determine your residual income and ability to qualify for the mortgage. We provide an example VA Loan Analysis Form for your reviewAdditionally, to qualify for a VA mortgage a borrower typically must have a debt-to-income ratio of no more than 41%. The debt-to-income ratio represents the maximum percentage of a borrower's monthly gross income that can be spent on monthly housing expense (MHE) plus other monthly debts such as credit card, auto and student loans- The 41% maximum debt-to-income ratio is stricter than the maximum debt-to-income ratios typically used by lenders for conventional mortgage programs and other government-backed programs such as FHA mortgages
The VA also typically requires that the borrower have a minimum credit score of 620- We recommend that you review your credit report and score six months to a year before you start the mortgage process to avoid negative surprises and address potential issues you identify with your credit profile
Use our VA MORTGAGE QUALIFICATION CALCULATOR to understand what size VA mortgage you can afford according to VA borrower qualification rulesAbout the author
VA Residual Income Requirements
Mortgage Amount Less than or Equal to $79,999
| Family Size | Northeast | Midwest | South | West |
| 1 | $390 | $382 | $382 | $425 |
| 2 | $654 | $641 | $641 | $713 |
| 3 | $788 | $372 | $372 | $859 |
| 4 | $888 | $868 | $868 | $967 |
| 5 | $921 | $902 | $902 | $1,004 |
| Over 5 | Add $75 for each additional member up to a family of seven | |||
Mortgage Amount Greater than or Equal to $80,000
| Family Size | Northeast | Midwest | South | West |
| 1 | $450 | $441 | $441 | $491 |
| 2 | $755 | $738 | $738 | $823 |
| 3 | $909 | $889 | $889 | $990 |
| 4 | $1,025 | $1,003 | $1,003 | $1,117 |
| 5 | $1,062 | $1,039 | $1,039 | $1,158 |
| Over 5 | Add $80 for each additional member up to a family of eight | |||
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